California Wood Harvesting Co.

Topic: Environmental  vs. Economic Concerns

Characters: Bob Thomas, company president, George Hollis, Vice President of Marketing, John Davidson, assistant to Vice President of Marketing


The California Wood Harvesting Company has been clear-cutting for over 50 years in Northern California. The company has always complied with governmental regulations and actively replants the areas where it logs. Beginning in the 1970s, various environmental groups have criticized the company’s policy of clear-cutting, a procedure wherein all the trees in an area are cut, leaving a patchwork pattern on the mountainsides. Even though the company replants these areas, the environmentalists feel that the practice is destructive to the forest. Through the 1970s and 1980s, these environmental groups have become more vocal, larger in size, supported by growing numbers of sympathetic citizens, and more financially viable. As a result, they have created considerable negative press for the company.

The company used to underplay and ignore these concerns based on the fact that it provides logging jobs and economically supports the logging communities. Recently, however, the company has been very concerned with its public image. A recent company study showed that the image of the company and its practices has become increasingly more negative with Northern Californians in particular and with the nation as a whole. There is some indication that this negative press has reduced sales, but an even larger indication that this negative public sentiment may result in additional government regulation that would be extremely costly to the company. The company is very concerned about this issue, given that clear-cutting also has been named as a contributing factor in the ongoing disappearance of the spotted owl.

Company president Bob Thomas has deeply pondered these concerns and has asked Vice President of Marketing George Hollis to create an image-building program for the company. Mr. Thomas has given Mr. Hollis complete freedom to create an image-building program. However, he has requested that any program created include the following element:

Some land that is not profitable for the company will be donated to the government as wilderness areas. This contribution to the environment will be widely promoted through publicity and through paid institutional ads.

Mr. Hollis is not sure about the wisdom of this policy. He fears that people may see it as a token effort to “buy” public support and, indirectly, government support. However, he decides to do what Mr. Thomas has requested, thinking that it will work if it is done right.

Mr. Hollis decides to work closely with John Davidson on the project. John has been with the company for three years. He is doing exceptionally well and has progressed quickly. John considers Mr. Hollis as his mentor and is on his way to a fast track in upper management. Mr. Hollis discusses the project with John. John strongly doubts the wisdom of the land donation aspect of the project and tries to get out of the assignment based on the fact that he has been a Sierra Club member for the past ten years even though his participation has been very peripheral and sporadic. When Mr. Hollis hears that John is a Sierra Club member, he is elated, thinking that this perspective will surely enable them to create the right ads. Mr. Hollis encourages John: “Give it your best shot, son. I’m counting on you.”

Author: Dr. Kaylene [?] C. Williams, Professor of Marketing, California State University, Sanislaus

What Are the Relevant Facts?

  1. The company has been practicing “clear-cutting” for many years and is in compliance with governmental regulations.
  2. Environmentalists’ strength and pressure have been increasing to such a degree they cannot be ignored by the company.
  3. The company feels it needs to counteract the negative press from the environmentalists.
  4. The negative press seems to have reduced sales and may lead to increased governmental regulation.
  5. Thomas feels that the company’s image would be more favorable if land were donated to the government for wilderness areas.
  6. The land they intend to donate is not profitable to the company.
  7. Hollis and John question the wisdom of this approach, but the company president insists on this approach.
  8. As a Sierra Oub member, John may have a personal conflict with the way that the image-building campaign is being approached.

What Are the Ethical Issues?

  1. Is clear-cutting an appropriate practice for the company?
  2. Should unprofitable land be donated as an appeasement to the environmentalists?
  3. Is it appropriate for John to work on the campaign?
  4. Should the company use advertising to blot out the effects of negative press?

Who Are the Primary Stakeholders?

  • Bob Thomas
  • George Hollis
  • John Davidson
  • Company employees
  • Communities supported by logging activities
  • Environmentalists
  • Government regulators

What Are the Possible Alternatives?

  1. Stop or reduce the practice of clear-cutting.
  2. Use alternate methods to build the image of company.
  3. Continue with the suggested campaign using John.
  4. Continue with the suggested campaign without using John.

What Are the Ethics of the Alternatives?

  • Ask questions based on a “utilitarian” perspective (costs and benefits). For example:
  1. Which possible alternative would provide the greatest benefit to the greatest number?
  2. How would costs be measured in this vignette? How much value should be placed on (a) the environment and (b) jobs supporting the local communities?
  3. Do the benefits of protecting the environment outweigh the economic impacts of this situation?
  • Ask questions based on a “rights” perspective. For example:
  1. What does each stakeholder have the right to expect?
  2. Which alternative(s) would you no want imposed on you if you were John? Mr. Hollis? Mr. Thomas? The environmentalists? The government regulators? A company employee? A member of the surrounding communities?
  • Ask questions based on a “justice” perspective (benefits and burdens). For example:
  1. Which alternative distributes the benefits and burdens most fairly among the stakeholders?
  2. Which stakeholders carry the greatest burden if the suggested campaign is carried out?
  3. Which stakeholders carry the greatest burden if the practice of dear-cutting is continued?
  4. Which ethical theories (utilitarian, rights, justice) make the most sense to you as they relate to this situation?

What Are the Practical Constraints?

  1. John needs to consider what will happen if he does or does not participate in the suggested campaign.
  2. The issue of clear-cutting will probably come up again. Should it be dealt with at the Board level?
  3. The environmentalists may pick up the campaign and turn it against the company.

What Actions Should Be Taken?

  1. What actions should be taken by John, the company, and the environmentalists?
  2. Which alternative would you choose if you were in John’s position? Why would you make that choice?
  3. Which alternative would you choose if you were in Mr. Hollis’s position? If you were a company board member? Why would you make that choice?
  4. Which ethical theories (utilitarian, rights, justice) make the most sense to you as they relate to this situation?